Default

The article may contain affiliate links from one or more partners. Learn how we make money to continue our financial wellness mission.

Failure of a borrower to repay a student loan according to the terms agreed upon when the promissory note was signed. When a borrower defaults, the school, loan holder, state government, and federal government can take action to recover the money. Defaults are reported to national credit bureaus and might affect a borrower’s ability to get credit in the future.